It hasn’t been a good year for video streaming services. In fact, Netflix for the first time, even lost customers last quarter. The space has become very saturated now, with many competing video subscription services. YouTube however remains as popular as ever, primarily because it’s free.
Sure, the company has annoyed a lot of people into buying it’s premium subscription, but that’s about it. YouTube did try to compete with the likes of Netflix and Amazon Prime with their own exclusive shows for YouTube premium, but that didn’t last very long as Google pulled the plug on the campaign. Now, it seems Google has another direction for YouTube.
Typically, companies with streaming hubs get a share of revenue from purchases within their marketplaces. YouTube is discussing splitting subscription revenue with streaming partners, although the terms may vary widely for each partner, according to people familiar with the situation. YouTube declined to comment.
– An excerpt from WSJ
According to the WallStreetJournal, YouTube is planning to launch a marketplace for video streaming services. Amazon Prime also has a very similar marketplace, where they sell additional channels like Discovery+, giving users access to more content.
Google is internally referring to the new service as “channel store“, and apparently the service has been in development for the last 18 months.
YouTube already has YouTube TV, which is a packaged cable service, starting at $64.99. The new YouTube “channel store” will be very similar, but now on the default YouTube app. This is a very smart move from Google, as it finally allows them to leverage their strength.
Now, the idea appears to be gaining traction with entertainment companies hungry for new audiences. YouTube has pitched the scale and diversity of its global audience as a reason why streaming services should join the effort, the people close to the discussions said.
– Another excerpt from WSJ
YouTube has around 2.5 billion active users across the globe, and they can offer that to willing streaming services that can host their content on YouTube for a subscription fee. This way, Google gets to use it’s distribution advantage from YouTube, without any of the troubles of movie or show production. For Google, it’s a easy choice between owning the platform or the content, when you can’t have both.